Late charges for delinquent rent payments under rental and lease agreements need to be set by statute, just as they are with mortgage payments, and for the same reason: to avoid abusive and excessive late charges in housing. Housing, as a necessity, cannot be subject to punitive extraction by vengeful landlords. Consider a grace period of ten days (mortgage payments currently have a 15-day grace period) with a maximum late charge of the lesser of $35.00 or 5%. Only one late charge may be imposed for any delinquency until it is brought current. A payment made during the month following the nonpayment or late payment is counted as an on-time payment for the next month’s rent, just as with mortgage payments. Thus, late fees do not compound from month to month when the tenant falls one month behind.
Is housing a luxury or a necessity?